New Rules Let Maldives Terminate Leases on Long-Stalled Resort Sites

The Tourism Ministry can now end leases on resort islands and lagoons that have stayed undeveloped for years without offering their developers another extension, under a regulation that took effect on 10 September.

Regulation 2026/R-80, published in the Government Gazette, sets the rules for granting extra time to finish tourism projects, deferring unpaid rent and fines, and handling resorts that close for redevelopment. It repeals Regulation 2022/R-236, which previously governed extensions.

Tourism and Civil Aviation Minister Mohamed Ameen described the measures at the government’s Ahaa public forum on 11 October. In remarks carried by PSM News, the state broadcaster that co-hosts the forum, he said 161 islands and lagoons were in a “distressed” state, including some left for 20 to 25 years and others for 10 to 12 years. He described the number as a rough figure.

He said land rent owed to the state had risen, after rescheduling, to about US$500–600 million in total. Neither figure appears in the regulation, and the ministry has not published a list of the sites.

Leases Overdue for Years

Article 17 of the regulation applies to developers whose construction periods were extended under earlier rules and to those whose rent-free development period ended without any extension. It sorts their leases into four groups.

• Termination without a further chance. Places more than eight years past their development period with over US$10 million in rent and fines owed, and places where no construction work has been done at all.
• Termination without a further chance. Unfinished places whose construction period has been extended by more than 60 months beyond the rent-free period, and which are eight years into their lease or less than 15% complete.
• One last extension. Places that never received an extension and are less than eight years into their lease. If they have not opened when it ends, the lease is terminated.
• Review. Places eight or more years into their lease that still have construction time left. If work is slow or has stopped, the ministry may act under the lease. If at least half the project is built, it may grant more time.

The ministry must notify any mortgage holder before terminating a mortgaged property. A developer whose lease is ended under Article 17 must still pay all accrued rent and fines.

Fees for More Time

Other developers may apply for more time only if building began within their original rent-free period. Islands and land plots can receive up to 12 months, and lagoons up to 24 months.

Each extension carries a US$100,000 fee plus monthly corporate social responsibility payments of between US$1,500 and US$10,000, depending on the atoll zone, the size of the island and the length of the extension. The money is due within 30 days of the ministry’s conditional approval; if it is not paid, the approval lapses and the lease can be terminated.

If more than half the work is complete when an extension ends, the ministry may allow more time. If less than half is complete, it may terminate the lease. Every lease amendment made under the regulation must state that the developer receives no compensation if the lease is terminated for not finishing within the maximum period.

Deferred Rent

Rent and fines that built up before an extension, and rent due during it, can be deferred. Repayment starts two years after the resort receives its operating licence, either over five years without interest or over the remaining lease term at 3% simple interest, in quarterly instalments.

A property that still has not opened when its extension ends must pay all deferred and other outstanding rent and fines within 24 months, or the ministry may terminate the lease.

Operating resorts may close for redevelopment for up to 18 months for a partial closure or 24 months for a full one. A further six months costs US$300,000 and a further 12 months US$600,000. After that, the ministry may end the lease without paying compensation.

Action ‘Within This Week’

Ameen told the forum the ministry would begin practical work on the measures “within this week”. As of 15 October, no termination notices or list of affected sites had been published in the Gazette or on the ministry’s website.

The President’s Office said the forum was held at the Sultan Park event area in Malé and broadcast live, with the health and culture ministers also taking questions.

According to the Maldives Monetary Authority’s statistics database, 179 resorts were operating at the end of August.